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Tuesday, 06 September 11
INDONESIAS PROPOSED COAL EXPORT BAN MAY HAVE IMPACT ON THE INDIAN POWER SECTOR - DIPESH DIPU
.jpg) COALspot.com - This is a special interview about Indonesian proposed coal export ban by 2014, with Mr. Dipesh Dipu, Director of Deloitte Touche Tohmatsu, India.
The Indonesian government is currently in the process of drafting a new regulation that could ban the export of low-grade coal by January 12, 2014. This is likely to apply to coal below 5700 kcal/kg on air dried basis in value.
As of now Indonesia is producing around 150 million tons of coal with calorific value below 5700 GAD (according to chairman of Indonesian coal mining association). However by 2014, there are possibilities the total production of below 5700 GAD coal may reach more than 200 million per annum.
Will Indonesian coal export ban impact on the Indian fuel requirements?
The earlier grade of coal that was being considered for proposed ban has GCV of 5100 kcal/kg of less (adb), which can be comparable to 3800-4200 kcal/kg (arb) domestic coal available in India. This grade of coal has found favor in India primarily due to likely price advantage but economics of power generation based on such grade of imported coal may be a suspect. This considering that such grades of coal from Indonesia typically have high moisture content, which makes transportation cost per unit of energy generated higher. The quantum of the low grade of coal (<5100 kcal/kg adb) procured from Indonesia is likely to remain relatively low.
However, if the new definition of low grade coal is applied (<5700 kcal/kg adb), it may be reasonable to believe that such a ban may have impact on the Indian power sector as volumes in this grade of coal are expected to rise in the proportion of coal exports to India. Several of the acquisitions made by Indian power generation companies in Indonesia have been in coal blocks that will produce coal of this grade, and a blanket ban on the exports can jeopardize power plant development in India.
On the other hand, the domestic Indonesian market may not be prepared to consume all the coal mined of this grade in view of the power generation capacity addition plans in Indonesia. In such a case, the coal mine development is likely to be deferred. The Indonesian law makers may need to reconsider domestic market demand, investment climate in coal sector and impact of the legislation on the export revenues.
What is the alternative source for Indian power industry if the proposed coal export ban come into effect by 2014?
Indian power generation companies have been forced to look out for coal assets abroad due to the investment and regulatory environment within the country. India boasts of more than 110 billion tonnes of coal reserves, which largely fall within a 300 meters of depth. If the regulatory and investment environment is amended to allow greater participation of private sector Indian dependence on imports will be reduced.
However, for imports, India will continue to look at Indonesia, South Africa, Australia and newer destinations like Mozambique and Columbia. But these sources also have constraints, domestic demands in South Africa is likely to restrict quantum jump in exports out of South Africa. Indonesia has also proposed domestic market obligations. Mozambique may have infrastructure constraints for large volumes of coal being transported from Tete province to ports of Maputo, Ncala or Beira. Australian coal is of high quality but may have higher costs of mining and transport.
What would be the additional cost if Indian consumers switch their sourcing origin from Indonesia?
Indonesia has competitive advantage due to its geographical closeness. However, on a per tonne basis, assuming comparable quality, costs of transport may make marginal difference when compared with South Africa and Mozambique.
When compared to Australian coal, due to the high quality, cost of energy may well be comparable even though shipping costs are higher. Between Indonesian coal (5500 kcal/kg adb priced at USD 90 per tonne) and Australian coal (6500 kcal/kg adb priced at USD 120 per tonne), indicative variable cost difference of power generation may be about Indian Rupees 0.20 to 0.30 per kWh (electricity unit) in favor of Indonesian coal.
Will it affect Indian economy growth or this coal export ban is ignorable as India can easily identify alternative sources of fuel?
The magnitude of growth in power generation in India will necessarily mean that coal will remain the mainstay. Natural gas has had issues of availability. Nuclear plant development is facing socio-political challenge in view of the risks of technology failure. Development of hydel power has also faced issues of land acquisition, rehabilitation & resettlement apart from the technical issues of hydro-geological features. Renewable sources such as solar and wind generation are still projected to constitute a small portion of India power generation mix. Identifying an alternative source that can match coal in its accessibility, availability and affordability in the context of scale of capacity addition required in India is a challenge.
What is the Indian government's role on this issue, whether government has to come out with the solution such as easing Indian mining and environment law, open up mining for foreigners, G2G arrangement, etc…?
There is a need to look at domestic sources with pro-active and constructive approach and make all necessary legal and statutory amendments that make the resources available and mineable. Easing the regulations may not be one of such measures but making those regulations work in sync with each other in a time bound and predictable manner must certainly be.
There is certainly a case for opening the domestic coal sector for private participation, including independent miners, and for foreign participation so that newer technology and enhanced scale of operations are implemented in India. The regulation also needs to permit risk capital to come in for prospecting and exploration.
For imports the G2G relations can be leveraged to secure coal assets. India has good relationship with Indonesia and has also signed a tax treaty with Mozambique in 2010 which will facilitate investments. Government may also engage with these countries to ease exports to India and extend fiscal support to coal mining companies investing in mining and associated infrastructure development.
About Dipesh Dipu
Dipesh Dipu works as Director with Deloitte Touche Tohmatsu India Pvt. Ltd in the Energy and Resources consulting practice of the firm and anchors the Firm’s initiative in the mining and metals sectors.
He is a mining engineering graduate from Indian School of Mines and is a Chartered Financial Analyst (CFA). He has also done executive program in business management from Indian Institute of Management Calcutta. Dipesh has recently been awarded the Abheraj Baldota Gold Medal for the Young Mining Engineer of the Year 2007 by the Mining Engineers’ Association of India in recognition of his contributions in the improvement of mining industry in India.
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Tuesday, 31 March 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX DOWN 0.43 PCT - XINHUA
China Taiyuan coal transaction price index stood at 132.17 points Monday, down 0.43 percent week on week.
The index, released by Chi ...
Tuesday, 31 March 20
COAL POWER REMAINS IN GLOBAL DECLINE, DESPITE CHINESE SURGE - SYDNEY MORNING HERALD
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Monday, 30 March 20
CORONAVIRUS - IMPLICATIONS FOR SHIPS AND CREW - GARD
KNOWLEDGE TO ELEVATE
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LAY-UP AND RE-ACTIVATION REVISITED - GARD
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The COVID-19 pandemic has affected the maritime industry in previously unthinkable ways. Ports around the world are denyi ...
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PANAMAX: INDONESIA LACKED VOLUME, PARTLY DUE TO FORCE MAJEURE IN INDIAN PORTS - BALTIC BRIEFING
Capesize
As Covid-19 continued to ratchet up tensions across the globe, the Cape market dealt with the change to remote working. Most regions o ...
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- Renaissance Capital - South Africa
- Posco Energy - South Korea
- Rashtriya Ispat Nigam Limited - India
- Aditya Birla Group - India
- Bulk Trading Sa - Switzerland
- Indogreen Group - Indonesia
- Bhatia International Limited - India
- Xindia Steels Limited - India
- Vedanta Resources Plc - India
- Latin American Coal - Colombia
- Altura Mining Limited, Indonesia
- Uttam Galva Steels Limited - India
- The Treasury - Australian Government
- Tamil Nadu electricity Board
- Orica Australia Pty. Ltd.
- Riau Bara Harum - Indonesia
- MS Steel International - UAE
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kepco SPC Power Corporation, Philippines
- Romanian Commodities Exchange
- Makarim & Taira - Indonesia
- Australian Coal Association
- Agrawal Coal Company - India
- Gujarat Mineral Development Corp Ltd - India
- GMR Energy Limited - India
- Global Business Power Corporation, Philippines
- Ministry of Transport, Egypt
- Carbofer General Trading SA - India
- Thai Mozambique Logistica
- San Jose City I Power Corp, Philippines
- International Coal Ventures Pvt Ltd - India
- Mjunction Services Limited - India
- Orica Mining Services - Indonesia
- Bayan Resources Tbk. - Indonesia
- Cement Manufacturers Association - India
- Attock Cement Pakistan Limited
- Globalindo Alam Lestari - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Global Coal Blending Company Limited - Australia
- Karaikal Port Pvt Ltd - India
- Mintek Dendrill Indonesia
- Indo Tambangraya Megah - Indonesia
- PNOC Exploration Corporation - Philippines
- Kartika Selabumi Mining - Indonesia
- Banpu Public Company Limited - Thailand
- South Luzon Thermal Energy Corporation
- Bangladesh Power Developement Board
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Trasteel International SA, Italy
- Tata Chemicals Ltd - India
- Siam City Cement - Thailand
- Independent Power Producers Association of India
- Grasim Industreis Ltd - India
- Merrill Lynch Commodities Europe
- Mercator Lines Limited - India
- Aboitiz Power Corporation - Philippines
- IHS Mccloskey Coal Group - USA
- OPG Power Generation Pvt Ltd - India
- Central Java Power - Indonesia
- Vizag Seaport Private Limited - India
- Timah Investasi Mineral - Indoneisa
- Kumho Petrochemical, South Korea
- SMG Consultants - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Indian Energy Exchange, India
- Therma Luzon, Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Power Finance Corporation Ltd., India
- Global Green Power PLC Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Rio Tinto Coal - Australia
- Kideco Jaya Agung - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Sinarmas Energy and Mining - Indonesia
- Goldman Sachs - Singapore
- Bukit Baiduri Energy - Indonesia
- Wilmar Investment Holdings
- Karbindo Abesyapradhi - Indoneisa
- SN Aboitiz Power Inc, Philippines
- CIMB Investment Bank - Malaysia
- Anglo American - United Kingdom
- Sojitz Corporation - Japan
- SMC Global Power, Philippines
- Oldendorff Carriers - Singapore
- Ministry of Mines - Canada
- Bhushan Steel Limited - India
- Parliament of New Zealand
- Bahari Cakrawala Sebuku - Indonesia
- Edison Trading Spa - Italy
- Borneo Indobara - Indonesia
- Wood Mackenzie - Singapore
- IEA Clean Coal Centre - UK
- Chamber of Mines of South Africa
- GAC Shipping (India) Pvt Ltd
- Holcim Trading Pte Ltd - Singapore
- Semirara Mining Corp, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Meralco Power Generation, Philippines
- Coalindo Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Planning Commission, India
- Economic Council, Georgia
- Cigading International Bulk Terminal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Petron Corporation, Philippines
- Coastal Gujarat Power Limited - India
- India Bulls Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indika Energy - Indonesia
- Essar Steel Hazira Ltd - India
- Commonwealth Bank - Australia
- Port Waratah Coal Services - Australia
- Indonesian Coal Mining Association
- Coal and Oil Company - UAE
- Bukit Makmur.PT - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Bhoruka Overseas - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- London Commodity Brokers - England
- Sical Logistics Limited - India
- ASAPP Information Group - India
- Kaltim Prima Coal - Indonesia
- ICICI Bank Limited - India
- PTC India Limited - India
- McConnell Dowell - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Straits Asia Resources Limited - Singapore
- Electricity Authority, New Zealand
- Malabar Cements Ltd - India
- Australian Commodity Traders Exchange
- White Energy Company Limited
- Sindya Power Generating Company Private Ltd
- Salva Resources Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Jaiprakash Power Ventures ltd
- Electricity Generating Authority of Thailand
- Larsen & Toubro Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ind-Barath Power Infra Limited - India
- Interocean Group of Companies - India
- Baramulti Group, Indonesia
- Singapore Mercantile Exchange
- Ceylon Electricity Board - Sri Lanka
- TeaM Sual Corporation - Philippines
- Dalmia Cement Bharat India
- TNB Fuel Sdn Bhd - Malaysia
- Parry Sugars Refinery, India
- Asmin Koalindo Tuhup - Indonesia
- Lanco Infratech Ltd - India
- Georgia Ports Authority, United States
- Binh Thuan Hamico - Vietnam
- GVK Power & Infra Limited - India
- Barasentosa Lestari - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Sarangani Energy Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Iligan Light & Power Inc, Philippines
- Pendopo Energi Batubara - Indonesia
- Sree Jayajothi Cements Limited - India
- Medco Energi Mining Internasional
- Mercuria Energy - Indonesia
- Siam City Cement PLC, Thailand
- Price Waterhouse Coopers - Russia
- Alfred C Toepfer International GmbH - Germany
- Energy Link Ltd, New Zealand
- GN Power Mariveles Coal Plant, Philippines
- Intertek Mineral Services - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Manunggal Multi Energi - Indonesia
- Africa Commodities Group - South Africa
- Thiess Contractors Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Samtan Co., Ltd - South Korea
- VISA Power Limited - India
- Kobexindo Tractors - Indoneisa
- Eastern Energy - Thailand
- Deloitte Consulting - India
- Antam Resourcindo - Indonesia
- Sakthi Sugars Limited - India
- Leighton Contractors Pty Ltd - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Bharathi Cement Corporation - India
- Madhucon Powers Ltd - India
- Gujarat Sidhee Cement - India
- Billiton Holdings Pty Ltd - Australia
- Metalloyd Limited - United Kingdom
- Meenaskhi Energy Private Limited - India
- Heidelberg Cement - Germany
- PetroVietnam Power Coal Import and Supply Company
- Directorate General of MIneral and Coal - Indonesia
- Energy Development Corp, Philippines
- Star Paper Mills Limited - India
- Marubeni Corporation - India
- The University of Queensland
- Chettinad Cement Corporation Ltd - India
- Minerals Council of Australia
- CNBM International Corporation - China
- LBH Netherlands Bv - Netherlands
- Indian Oil Corporation Limited
- Simpson Spence & Young - Indonesia
- Eastern Coal Council - USA
- Maheswari Brothers Coal Limited - India
- Formosa Plastics Group - Taiwan
- Jindal Steel & Power Ltd - India
- Ministry of Finance - Indonesia
- New Zealand Coal & Carbon
- The State Trading Corporation of India Ltd
- PowerSource Philippines DevCo
- Videocon Industries ltd - India
- Standard Chartered Bank - UAE
- Central Electricity Authority - India
- Ambuja Cements Ltd - India
- Directorate Of Revenue Intelligence - India
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